The BRICS+ group of countries is better positioned to fiscally combat any future major economic crisis, as these countries have a lower debt-to-GDP ratio, highlighted a report by Ernst & Young, an international consulting firm.
The report states that BRICS+ nations are in a stronger fiscal position than the G7 countries because they have a lower debt-to-GDP ratio and benefit from access to higher primary deficits and a nearly equal excess of growth over interest rates.
“The BRICS+ group is better placed to fiscally combat any future major economic crisis, as it has a lower debt-to-GDP ratio, access to higher primary deficits, and a near-equal excess of growth over interest rates compared to the G7 group,” said the report.
The report emphasized that both the G7 and BRICS+ groups are crucial in shaping global economic trends. While G7 nations hold a larger share of global GDP when measured at market exchange rates, the BRICS+ group has a significant and growing share when evaluated in terms of Purchasing Power Parity (PPP).
It added that by 2029, BRICS+ is projected to have a 29.2% share of global GDP in market exchange terms and 38.3% in PPP terms. In comparison, the G7’s share is expected to be 42.4% in market exchange terms and 27.5% in PPP terms.
The report highlighted that, over the years, the G7’s share of global GDP has steadily declined. In 2002, the G7 accounted for 64.4% of global GDP, but this has fallen to an estimated 44.4% in 2024, a decline of 20 percentage points. According to International Monetary Fund (IMF) projections, the G7’s share is expected to drop further to 42.4% by 2029.
On the other hand, the BRICS+ group has seen its share of global GDP rise significantly. In 2002, BRICS+ accounted for just 10.1% of the world economy, but by 2024, this figure is expected to grow to 27.3%, an increase of 17.2 percentage points. By 2029, BRICS+ is projected to increase its share to 29.2%.
The E&Y report concludes that while the G7 group continues to play a significant role in global economic affairs, the BRICS+ countries are steadily gaining ground, particularly when measured in PPP terms. It asserts that the BRICS+ nations are better prepared to manage future economic challenges due to their more favorable fiscal conditions.
(ANI)
